Insurance Research by Expert RA

Title	Summary
Russian Insurance Market in 2009: Ice age	The first large-scale recession in the Russian insurance market resulted in change in the target guides of insurers, their owners and insurance supervisors. In 2009 the volume of the Russian insurance market reduced by 7.5% See more
Pseudo Insurance Operations in 2008 - the 1st half of 2009: still waters have deep schemes	Notwithstanding general decrease in the share of pseudo insurance operations, at a number of companies characterized by high goodwill, increase in the share of schemes has been observed. Pseudo insurance operations became again not only the appanage of the endangered kind of circuit designers but also an alternative "business" for companies operating in the real insurance market. See more
Market of corporate insurance: optimization instead reduction	Demand for corporate insurance turned out to be low-sensitive to crisis events in economy. Even taking into account material decline in tariff rates, the volume of the market of corporate insurance in 2009 reduced compared to 2008 only by 6.3%. For comparison, the market of retail insurance which depends to a significant extent on bank lending, fell down over the same period of time by 13.8%. See more
Russian Reinsurance Market: Hidden Development	According to forecasts of Expert RA, the amount of real reinsurance premium will amount in 2009 to 25.1 billion rubles (40.7 billion rubles according to official data). In 2010 the real market will continue to grow up mainly on account of the international segment and new types of imputed insurance. The amount of real reinsurance premiums received by Russia re-insurers in 2010 will be 26.7 billion rubles (34.7 billion rubles according to official data). See more
Life Insurance Market in 2009: This is Hard Life	Notwithstanding the crisis and decline of real premiums for life insurance, companies operating in this segment of the insurance market continue to conclude new contracts - the volume of the new business for life insurance reached in 2009 to 8.5 billion rubles. In total, according to official statistics, the amount of life insurance premiums amounted to 15.7 billion rubles, less than in 2008 by 18.6%. See more
Market of Voluntary Medical Insurance: voluntary medical insurance is stronger than the crisis	Clients do not want to refuse voluntary medical insurance. During the crisis no mass outflow of corporate clients of voluntary medical insurance was observed. Following the results of the first half of 2009 the segment of voluntary medical insurance reduced together with the market and decreased by 7%, amounting to 49,970 million rubles. See more
Motor Hull Insurance Market: Died on Elevation	According to forecasts of Expert RA, in 2010 the market of motor hull will be in stagnation. In 2009 premiums for motor hull insurance received through bank and dealer channels of sale were going down with the fastest rates. Within the agency channel of sales premiums were redistributed in favor of reliable insurers. Direct sales on the background of general decline grew up to the contrary. See more
Development of the direct insurance in Russia: to achieve efficiency	The main idea of direct insurance consists not in savings on agency commissions but rather in use of new technologies and powerful IT system. The opinion that there is nothing new in direct insurance is mistaken. See more
Third party legal liability insurance of operators of especially hazardous facilities market: catastrophic consequences	The accident at the Sayano-Shushensk hydro power plant revealed the necessity for complete modernization of the market of third party legal liability insurance of operators of especially hazardous facilities market (TPLLIOEHF). Like the terrorist act on the 11th of September 2001 in the USA led to full review of the principles of assessment of terrorist risks by both insurers and policyholders, the accident at the Sayano-Shushensk hydro power plant will provoke reevaluation of risks of hydro power plants similar to the at the Sayano-Shushensk one in terms of technical characteristics. Insurance companies will change the approach to assessment of such risks, will increase the value of maximum possible damage. Reinsurers will also stiffen the underwriting and pricing policy. See more
The market for insurance of property of individuals (other than hull and cargo insurance): smooth water	A significant share of insurance of individuals' property (other than hull and cargo insurance) in the insurance portfolio of the insurer will help it to maintain the aggregate loss at a non-hazardous level. Unlike markets of motor hull insurance and insurance of property of enterprises, competition in the market of insurance of individuals' property (other than hull and cargo insurance) mainly concerns not prices but service. See more
Measures for support of insurance companies under the crisis conditions: first of all control, then financing	The margin of solvency of Russian insurers grows up, reliability - goes down. Dynamics of the margin of solvency of insurance companies are affected by two tendencies at the same time: the normative amount of the insolvency margin is decreasing due to reduction of insurance premium, and the actual one - due to impairment of assets. As a result of these two parallel processes, for the first time over several years the average value of actual and normative margin of insolvency of Russian insurers grew up See more
Benchmarks of insurance companies following the results of 2009: unearned profit	increase in rates of return on assets of Russian insurers hides decline in their financial stability. Averaged rate of return on assets of domestic insurance companies amounted in 2009 to 3.3% (1.4% in 2008), the averaged rate of adequacy of own funds increased from 49.3 to 56.7%. At the first sight, the year of 2009 turned out to be more successful for Russian insurers who managed in general to straighten their financial indicators. This impression is deceptive: the rate of return on assets grew up as a result of under-reservation for corporate risks and operations with off-balance obligations. See more
2008
The first ranking of Russian insurers by International Financial Reporting Standards (IFRS)	At last we have reached the level of IFRS: for the first time it was made possible to rank Russian insurers by IFRS. The first ranking comprised only nine Russian insurers - 1% of the whole number of Russian insurers. According to Expert RA, IFRS reporting is being prepared by at least 20 Russian insurers, mostly incapable of disclosing the information in public. See more
The Russian insurance market, 2008	The financial crisis proved the insurance sector being unable to develop by way of dumping and imputed insurance. 2009 will see Russian insurers paying for past mistakes. As a result the market would be less sizeable, but more professional. See more
Profitability and unprofitability of insurers: Paradoxical dynamics, 2008	It is well known that for several years the insurance business has grown unprofitable. But in 2007 combination of the unprofitability components was notably changed - rapidly growing operational expenses took the lead. See more
Export insurance, 2008	Export credit insurance may be instrumental in diversifying the Russian export mostly due to hidden potential of the nuclear industry and the military industrial complex. Poor diversification of the Russian export is one of the most urgent economic problems in the country. According to the Federal Customs Service, in 2007 more than 67% of domestic export abroad was covered by fuel and energy sector 2007. See more
The cargo transportation market	Volume of aggregated contributions to insure cargo transportation declined (considering inflation). In 2007 the total market of cargo insurance and liability of carriers went up from 14.8 to 15 bln rubles (about 1% growth). According to Expert RA, the first half of 2008 showed no decline in increment. Share of insured cargo at the market has generally grown up with insurance becoming an inherent part of logistic structure, but collections remain practically unchanged. Still, growing potential of the cargo insurance market is huge. See more
Insurance market 2008/2009: Flying over the abyss	According to Expert RA the Russian insurance market in 2009 would total 520 bln rubles. Downfall at the insurance market is mostly attributable to autocasco insurance (-44 bln rubles), insurance of legal entities from fire or other risks (-12 bln rubles), voluntary medical insurance (-7 bln rubles) and insurance from accidents and diseases (6 bln rubles). Insurance contributions may grow in civil and erection works and the Olympic construction related risks; also, in types of insurance with the state involvement (agricultural insurance, space risk insurance, state contracts liability insurance). See more
The Russian insurance market, first half of 2008	The first half of 2008 at the Russian insurance market featured two trends: tariff leveling and decreased rates of credit-related insurance growth. Stable and profitable business has gradually become of more importance than the market share. See more
The agricultural risk insurance market: Step forward, two steps back	In 2008 the agricultural risk insurance market amounted to 10-15 bln rubles, according to Expert RA. More precise assessment is barred by absence of general statistic and the market non-transparency. The RF Ministry of Agriculture maintains that only 25.5% of cultivation area is covered by insurance. The agricultural insurance market consists of two unequal parts: voluntary insurance and state-supported insurance, the latter responsible for over 70% of the market aggregate contributions. See more
Motor insurance market: Dumping kamikaze	The motor market growth was inspired by credit boom. At the same time voluntary insurance segment at the motor insurance market was almost standing idle. It resulted in negative trends: poor quality of servicing, absence of specific customized insurance products, low level of professional training of insurance employees. See more
Review of the insurance broker market: getting closer to a civilized market	Licensing of Russian insurance and re-insurance brokers made the broker market more civilized; specialized reporting №1-broker made the market more transparent with prerequisites for proper information infrastructure. Still, majority of insurance brokers are not yet ready to disclose information on their activity, which testifies to the market immaturity. See more
2007
OSAGO market, July 1, 2003 to December 31, 2007: the market on the brink	According to Expert RA analysts, if new adjustments related to a simplified procedure of registering road traffic accidents (RTA) and a system of direct compensation of losses take force without an adequate increase of tariffs, the OSAGO market annual un-profitability factor by January 1, 2010 would be 97.7%, by January 1, 2011 - 107.9%, which would be inevitably followed by the OSAGO market comprehensive crush. See more
The 2007 insurance market: long-awaited success	The market structure: as might be expected, mandatory types of insurance grow faster than voluntary ones, but the growth should be attributed to increased state financing of health-care system, mostly through mandatory medical insurance - which, actually, is not insurance, but a mechanism for redistributing budget funds. See more
The insurance market development, the first half of 2007	The process of cleaning the Russian life insurance market from "grey schemes" has practically been completed in the first half of 2007, and the market has basically turned into a classic one. Still, at the period the life insurance market might have reached better results - a number of large international companies started much slower than expected. The 2007 second half indicators at the life long-term insurance market are envisaged to be much better than the first half, due to tenser competition and extended presence of many companies in the regions. See more
Business handbook "Russian insurance market: real indices and prospects"	Business handbook presents results of the long-term follow up study by Expert RA Rating Agency over situation on insurance market. The purpose of study is to reveal trends of the real market free of non-risk operations. See more
Russian Insurance Market, 2000	Only four to five years ago, the Russian insurance market was existing in an absolute information vacuum. Both the State and the society did not take any interest in the problems of insurance. As for the insurers, they did their business: somebody was quietly cashing the salaries and wages, and somebody else was trying to develop the classical insurance. See more